August 2015 Flash Report

Slowing economic growth, uncertainty about future interest rates, and central bank policy actions dominated investor attention in August. Prompted by the PBoC’s surprise currency devaluation to stimulate growth and stabilize markets, volatility spiked and markets sold off as investors worried that China’s economic slowdown might be larger than expected and could induce a global recession. At the same time, US GDP growth was revised up to a healthy 3.7% rate, increasing expectations for an earlier Fed rate hike and intensifying concerns about knock-on effects in currencies.